Quote:
Originally Posted by SSM_DC5
What are the benefits of making a large contribution at the start vs just keeping to 2500 a year and put that same money from the large contribution elsewhere like TFSA.
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So up to $36k of contributions the advantage is with the RESP (over TFSA) because of the $500 in grants (don't forget to claim your BCTESG grant as well!) so the first 14.4 years of contributions work in the RESP's favour. If you then have TFSA space then the TFSA is better (as your child will have to pay a bit of taxes as they pull the money out of their RESP), once your TFSA space is gone then the RESP's last $14k of contribution space works out better.
The front loading thing is only valuable if you've already maxed out your TFSA for personal use (and not to fund your kid's education), you're looking for a tax shelter that beats an RRSP or a Non-Registered account, AND you're fine with giving your kid the money (technically you can get it back by charging them rent when they turn 18).